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An Examination of the Relationship Between Subsidies on Production and Technical Efficiency in Agriculture: The Case of Cotton Producers in Greece


  • Emvalomatis, Grigorios
  • Oude Lansink, Alfons G.J.M.
  • Stefanou, Spiro E.


Subsidies on production have long been criticized for protecting producers from competition, and thus removing an incentive for efficient use of the resources. This study undertakes the examination of the impact of partially decoupled subsidies on the technical efficiency scores of cotton producers in Greece. The results indicate that compensatory area payments reduce the efficiency scores of the producers by diverting resources from products for which the subsidy is based on the area planted to the production of cotton, for which the aid is related to the volume of output.

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  • Emvalomatis, Grigorios & Oude Lansink, Alfons G.J.M. & Stefanou, Spiro E., 2008. "An Examination of the Relationship Between Subsidies on Production and Technical Efficiency in Agriculture: The Case of Cotton Producers in Greece," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6673, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa107:6673

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    References listed on IDEAS

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    5. Werner Kleinhanß & Carmen Murillo & Carlos San Juan & Stefan Sperlich, 2007. "Efficiency, subsidies, and environmental adaptation of animal farming under CAP," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 49-65, January.
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    12. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
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    Cited by:

    1. Minviel, Jean Joseph & Latruffe, Laure, 2014. "Meta-regression analysis of the impact of agricultural subsidies on farm technical efficiency," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182767, European Association of Agricultural Economists.
    2. repec:sek:jijoes:v:6:y:2017:i:1:p:18-32 is not listed on IDEAS
    3. Skevas, Theodoros & Lansink, Alfons Oude & Stefanou, Spiro E., 2012. "Measuring technical efficiency in the presence of pesticide spillovers and production uncertainty: The case of Dutch arable farms," European Journal of Operational Research, Elsevier, vol. 223(2), pages 550-559.
    4. Laure Latruffe & Hervé Guyomard & Chantal Le Mouël, 2009. "The role of public subsidies on farms’ managerial efficiency: An application of a five-stage approach to France," Working Papers SMART - LERECO 09-05, INRA UMR SMART-LERECO.

    More about this item


    panel data; stochastic distance function; subsidies in agriculture; Agricultural Finance; Crop Production/Industries; Production Economics;

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